§15300. Distribution Activities.
A licensed distributor shall distribute only cannabis and cannabis products, cannabis accessories, and licensees’ branded merchandise or promotional materials.
Authority: Sections 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§15301. Storage Services.
(a) A licensed distributor may provide storage services, including storage-only services that are unrelated to the quality assurance and laboratory testing processes, to a licensed cultivator, licensed manufacturer, licensed microbusiness, licensed retailer, or another licensed distributor.
(b) A licensed distributor may provide storage services to other licensees for cannabis goods packaged as they will be sold at retail, cannabis accessories, and licensees’ branded merchandise or promotional materials only.
(c) A licensed distributor shall ensure that each batch of cannabis goods that are stored for another licensee are stored in accordance with section 15302.
(d) Notwithstanding subsection (b), a licensed distributor shall not store live plants, except for seeds, on the licensed premises.
(e) Items held for storage-only services by a licensed distributor pursuant to subsection (b) may be distributed from the premises of the licensed distributor providing the storage- only services.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26110, Business and Professions Code.
§15302. Storage of Batches for Testing.
(a) A licensed distributor shall ensure that all batches of cannabis or cannabis products are stored separately and distinctly from other batches of cannabis or cannabis products on the licensed distributor’s premises.
(b) In addition to any tag or label required by section 15048.5, a licensed distributor shall ensure a label with the following information is physically attached to each container of each batch:
- The name, license number, and licensed premises address of the licensee who provided the batch;
- The date of entry into the licensed distributor’s storage area;
- The unique identifiers and batch number, if any, associated with the batch;
- A description of the cannabis or cannabis products with enough detail to easily identify the batch;
- The weight of or quantity of units in the batch; and
- The best-by, sell-by, or expiration date of the batch, if any.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26110 and 26120, Business and Professions Code.
§15303. Packaging, Labeling, and Rolling.
(a) A licensed distributor may package, repackage, label, and relabel cannabis in the form of dried flower, including pre-rolls, for retail sale. All packages of cannabis in the form of dried flower, including pre-rolls, shall comply with the requirements in chapter 11.
(b) A licensed distributor shall not process cannabis, but may roll pre-rolls that consist exclusively of any combination of flower, shake, leaf, or kief. Pre-rolls shall be rolled, packaged, and labeled prior to regulatory compliance testing.
(c) Licensed distributors may label and relabel a package containing manufactured cannabis or cannabis products with the amount of cannabinoids and terpenoids based on regulatory compliance testing results.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013 and 26120, Business and Professions Code.
§15303.1. Net Weight of Dried Flower.
For purposes of this division, the net weight on any packaged cannabis good containing dried flower only shall not be considered inaccurate if the actual weight is within plus or minus 3% of the labeled weight.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26013, 26120 and 26152, Business and Professions Code.
§15304. Testing Arrangements.
After taking physical possession of a batch of cannabis or cannabis products, the licensed distributor shall contact a licensed testing laboratory and arrange for a laboratory employee to come to the licensed distributor’s licensed premises to select a representative sample for laboratory testing.
Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 26104 and 26110, Business and Professions Code.
§15305. Testing Sample.
(a) The licensed distributor shall ensure that the batch size from which the sample is taken meets the requirements of this division.
(b) A licensed distributor or an employee of the licensed distributor shall be physically present to observe the laboratory employee obtain the sample of cannabis or cannabis products for testing and shall ensure that the increments are taken from throughout the batch.
(c) The sampling shall be video-recorded with the batch number stated verbally or in writing on the video at the beginning of the video and a visible time and date indication on the video recording footage. The video recordings shall be maintained for 90 calendar days by the licensed distributor.
(d) After the sample has been selected, both the licensed distributor and the laboratory employee shall sign and date the chain of custody form pursuant to section 15706 attesting to the sample selection having occurred.
(e) A licensed distributor shall not assist the laboratory employee nor touch the cannabis or cannabis products or the sampling equipment while the laboratory employee is obtaining the sample.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26104 and 26110, Business and Professions Code.
§15306. Regulatory Compliance Testing Results.
(a) A licensed distributor shall store a batch on its licensed premises until it either:
- Passes regulatory compliance testing as described in subsection (b); or
- If it fails regulatory compliance testing as described in subsection (d), a corrective action plan for remediation has been approved by the Department pursuant to section 17305.
(b) A batch passes regulatory compliance testing when the sample meets specifications in chapter 6. Once a batch has passed regulatory compliance testing, the batch shall not be repackaged into a new production batch in the track and trace system nor shall it be assigned a new batch number.
(c) When a batch passes regulatory compliance testing, the cannabis or cannabis products may be transported to one or more licensed retailers, licensed distributors, or licensed microbusinesses authorized to conduct distribution or retail. A copy of the certificate of analysis for regulatory compliance testing shall be provided to all licensed distributors receiving the batch for purposes of quality assurance review under section 15307. A copy of the certificate of analysis shall also be provided to the licensee who produced the batch. The copies of the certificate of analysis required by this subsection may be provided electronically.
(d) A batch fails regulatory compliance testing when the sample does not meet specifications in chapter 6.
(e) If a failed batch has been approved for remediation by the Department pursuant to section 17305, a licensed distributor may transport or arrange for the transportation of the batch to the licensed manufacturer or microbusiness authorized to engage in manufacturing that has received approval from the Department to conduct the remediation. Once a batch has been approved for remediation by the Department, the licensed distributor shall transport the batch to the approved manufacturer or microbusiness within 30 calendar days of the approval.
(f) A licensed distributor shall destroy a batch that failed regulatory compliance testing and cannot be remediated pursuant to section 17305 within 60 days of failure of the batch or 30 days of receiving notification from the Department that the batch may not be remediated. The distributor shall notify the licensed manufacturer or cultivator who produced the batch of the destruction and the reasons for it. Evidence of destruction including, but not limited to, video or photos of the destruction shall be provided to the Department upon request.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070, 26100, 26104 and 26110, Business and Professions Code.
§15307. Quality-Assurance Review.
When a licensed distributor receives a certificate of analysis for regulatory compliance testing from the licensed testing laboratory or upon transfer from another licensed distributor stating that the batch meets specifications required by law, the licensed distributor shall ensure the following before transporting the cannabis goods to one or more licensed retailers or licensed microbusinesses authorized to engage in retail sales:
(a) The certificate of analysis for regulatory compliance testing that the licensed distributor received from the licensed testing laboratory or another licensed distributor is the certificate of analysis that corresponds to the batch;
(b) The date on the certificate of analysis for the regulatory compliance testing is less than 12 months old;
(c) The label on the cannabis goods is consistent with the certificate of analysis for regulatory compliance testing regarding cannabinoid content required to be listed by law as follows:
- If the cannabis goods are labeled with the content for cannabinoids, terpenoids, Total THC, and/or Total CBD prior to receiving the certificate of analysis for regulatory compliance testing, the licensed distributor shall ensure that the labeled amounts are accurate in accordance with section 15307.1, and
- If the cannabis goods are not labeled with the content for cannabinoids, terpenoids, Total THC, and/or Total CBD prior to receiving the certificate of analysis for regulatory compliance testing, the licensed distributor shall label the cannabis goods with the amounts listed on the certificate of analysis pursuant to section 15303;
(d) The packaging and labeling of the cannabis goods complies with Business and Professions Code section 26120 and this division, except cannabis goods are not required to be labeled or otherwise identified as medicinal products prior to retail sale unless the cannabis goods must be labeled as such pursuant to this division;
(e) The cannabis goods have not exceeded their expiration or sell-by date if one is provided;
(f) The weight or count of the batch comports with that in the track and trace system. A licensed distributor shall use scales as required by this division; and
(g) All events prior to receipt of the certificate of analysis for regulatory compliance testing have been entered into the track and trace system.
(h) If the licensed distributor determines that the cannabis goods are not fit for sale because they do not meet the requirements of this section, then the distributor may arrange for a corrective action plan to be submitted pursuant to section 17305 in accordance with the following:
- If the cannabis goods may be relabeled by the licensed distributor, another distributor, or microbusiness authorized to engage in distribution, then the distributor who will conduct the remediation shall submit a corrective action plan pursuant to section 17305. Transport to another licensed distributor or microbusiness authorized to engage in distribution shall not occur until the corrective action plan has been approved by the Department.
- If the cannabis goods may only be remediated by a licensed manufacturer or microbusiness authorized to engage in manufacturing because they must be repackaged or reprocessed, then the licensed distributor shall comply with the provisions of subsections (e) and (f) of section 15306.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070, 26110 and 26120, Business and Professions Code.
§15307.1. Quality-Assurance Review for Labeling Cannabinoids and Terpenoids.
(a) For purposes of this division, any one cannabinoid, THC, Total THC, CBD and/or Total CBD claimed to be present on a label shall not be considered inaccurate if the difference in percentage on the certificate of analysis is plus or minus 10.0%.
(b) For purposes of this division, the terpenoid testing results on the label of any one terpenoid claimed to be present shall not be considered inaccurate if the difference in percentage on the certificate of analysis is plus or minus 10.0%.
(c) For purposes of this section, the difference in percent shall be calculated using the following equation:
Difference in percent = │(laboratory measurement – label claim) │/ (label claim) x 100%
(d) For purposes of this section, Total THC and Total CBD shall have the same meaning as defined in chapter 6.
(e) Cannabis goods shall be labeled with accurate concentration limits in accordance with sections 17304 and 17407.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26100 and 26110, Business and Professions Code.
§15307.2. Licensed Distributor to Licensed Distributor Transfers.
(a) Cannabis goods that have undergone and passed regulatory compliance testing and have an accompanying certificate of analysis may be transferred to one or more licensed distributors.
(b) Cannabis goods that have not been transported to retail within 12 months of the date on the certificate of analysis must be destroyed or retested by the licensed distributor in possession of the cannabis goods. Retesting pursuant to this subsection shall only be conducted if the cannabis goods have not been modified in any way.
(c) If the licensed distributor, manufacturer, or microbusiness authorized to engage in manufacturing will be repackaging, relabeling, reformulating, or modifying the cannabis goods in any way, they shall submit a corrective action plan pursuant to section 17305 and receive approval from the Department before beginning modifications to the cannabis goods.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26110, Business and Professions Code.
§15308. Insurance Requirements.
(a) A distributor licensee shall at all times carry and maintain commercial general liability insurance in the aggregate in an amount no less than $2,000,000 and in an amount no less than $1,000,000 for each loss.
(b) A distributor licensee shall maintain the insurance required in subsection (a) from an insurance company that is:
- A non-admitted insurer that meets the requirements of Insurance Code section 1765.1 or 1765.2, and the insurance is placed pursuant to Insurance Code section 1763 and through a surplus line broker licensed under Insurance Code section 1765;
- An insurer qualified to do business in California by the Secretary of State and authorized by the Insurance Commissioner to write the liability and property classes of insurance as defined by Insurance Code sections 102, 103, 107, 108, 114, and 120; or
- A registered risk retention group compliant with the California Risk Retention Act of 1991. (See Insurance Code sections 125-140.)
(d) Admitted insurers and risk retention groups must show proof of capitalization in the amount of at least $10,000,000.
Authority cited: Section 26013, Business and Professions Code.
Reference: Sections 26051.5 and 26070, Business and Professions Code.
§15309. Inventory Accounting.
(a) A licensed distributor shall be able to account for all inventory and provide that information to the Department upon request.
(b) To account for inventory, a licensed distributor shall ensure all batches of cannabis or cannabis products are stored in accordance with section 15302 and shall be able to provide the Department with the status of the batch as follows:
- The batch is being held in storage for another licensee;
- The batch is awaiting sampling for regulatory compliance testing;
- The batch has been sampled and is awaiting regulatory compliance testing results;
- The batch has passed regulatory compliance testing;
- The batch has failed regulatory compliance testing and is awaiting approval for remediation;
- The batch has failed regulatory compliance testing and is awaiting destruction; and
- The batch is being stored or held for any other lawful purpose under the Act or this division.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26070 and 26160, Business and Professions Code.
§15311. Requirements for the Transportation of Cannabis and Cannabis Products.
The following requirements apply when transporting cannabis and cannabis products between licensees or licensed premises:
(a) Transportation shall only be conducted by persons holding a distributor license under the Act, or employees of those persons. All vehicles and trailers used for transportation shall be owned or leased, in accordance with the Vehicle Code, by the licensee. The licensee is not required to be the sole owner or lessor of the vehicle or trailer and all owners and lessors may use the vehicle for non-commercial cannabis activity.
(b) Prior to transporting any cannabis and cannabis products goods, the licensed distributor shall have a completed sales invoice or receipt that meets the requirements of Business and Professions Code section 26161. The licensed distributor shall only transport cannabis and cannabis products listed on the sales invoice or receipt. The sales invoice or receipt may not be altered or changed once transport begins.
(c) A licensed distributor employee shall always carry a copy of the distributor’s license and a copy of the QR Code Certificate issued by the Department while engaging in the transportation of cannabis goods. The QR Code Certificate shall comply with the requirements of section 15039, subsection (d).
(d) All vehicles transporting cannabis goods for hire shall be required to have a motor carrier permit issued to the licensed distributor pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle Code.
(e) Transportation by means of aircraft, watercraft, drone, rail, human-powered vehicle, or unstaffed vehicle is prohibited.
(f) Cannabis and cannabis products shall only be transported inside of a vehicle or trailer and shall not be visible or identifiable from outside of the vehicle or trailer.
(g) Cannabis and cannabis products shall be transported in a fully enclosed, windowless, locked trailer or trunk that cannot be accessed from inside the vehicle, or in a secured area or compartment within the interior of the vehicle. A “secured area” is defined as an area where solid or locking metal partitions, cages, or high-strength shatterproof acrylic can be used to create a secure compartment in the fully enclosed vehicle. The secured area may be comprised on three sides of any part of the body of the vehicle, provided the parts of the vehicle used for the purposes of this section are shatterproof and are not made of glass.
(h) While left unattended, vehicles and trailers shall be locked and secured.
(i) A licensed distributor shall not leave a vehicle or trailer containing cannabis and cannabis products unattended in a residential area or parked overnight in a residential area.
(j) At a minimum, a licensed distributor shall have a vehicle alarm system on all transport vehicles and trailers. Motion detectors, pressure switches, duress, panic, and hold-up alarms may also be used.
(k) Packages or containers holding cannabis and cannabis products shall not be tampered with, or opened, during transport.
(l) A licensed distributor transporting cannabis and cannabis products shall only travel between licensees shipping or receiving cannabis and cannabis products and its own licensed premises when engaged in the transportation of cannabis and cannabis products. The licensed distributor may transport multiple shipments of cannabis and cannabis products at once in accordance with applicable laws. A licensed distributor shall not deviate from the travel requirements described in this section, except for necessary rest, fuel, or vehicle repair stops.
(m) Under no circumstances may non-cannabis goods, except for cannabis accessories and licensees’ branded merchandise or promotional materials, be transported with cannabis and cannabis products.
(n) Vehicles and trailers transporting cannabis and cannabis products are subject to inspection by the Department at any licensed premises or during transport at any time.
(o) Notwithstanding subsections (e) through (g), if it is not operationally feasible to transport cannabis or cannabis products inside of a vehicle or trailer because the licensed premises that the cannabis or cannabis products will be transported from and the licensed premises that will be receiving the cannabis or cannabis products are located within the same building or on the same parcel of land, the cannabis or cannabis products may be transported by foot, hand truck, fork lift, or other similar means. A shipping manifest that complies with this division is required when transporting cannabis or cannabis products pursuant to this subsection.
(p) Notwithstanding subsection (e), transportation of cannabis and cannabis products may be conducted via waterway to licensees located on Catalina Island. The provisions of this section and other sections regarding vehicle requirements also apply to vessels used to transport cannabis and cannabis products via waterway pursuant to this section.
Authority: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§15312. Required Transport Vehicle Information.
(a) Upon request, the licensed distributor shall provide the Department with a copy of the certificate of ownership or registration card issued by the California Department of Motor Vehicles, the year, make, model, license plate number, and Vehicle Identification Number in writing, and proof of insurance for any vehicle or trailer used to transport cannabis or cannabis products.
Authority cited: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§15313. Transport Personnel Requirements.
(a) No person under the age of 21 years old shall be in a commercial vehicle or trailer transporting cannabis or cannabis products; and
(b) Only a licensee, an employee of the licensed distributor, or security personnel who meets the requirements of section 15045 shall be in a vehicle while transporting cannabis or cannabis products.
Authority cited: Section 26013, Business and Professions Code.
Reference: Section 26070, Business and Professions Code.
§15314. Shipping Manifest.
(a) Prior to transporting cannabis or cannabis products, a licensed distributor shall generate a shipping manifest through the track and trace system for the following activities:
- Regulatory compliance testing and sampling;
- Sale of cannabis or cannabis products to a licensee;
- Destruction or disposal of cannabis or cannabis products; and
- Any other activity, as required pursuant to this division, or by the Department.
(b) The licensed distributor shall transmit the shipping manifest to the Department and the licensee that will receive the cannabis or cannabis products prior to transporting the cannabis or cannabis products.
(c) The licensed distributor shall ensure and verify that the cannabis or cannabis products being taken into possession for transport at the originating licensed premises are as described and accurately reflected in the shipping manifest. For purposes of this section, the licensed distributor may verify that the cannabis or cannabis products are accurately reflected in the shipping manifest by confirming that the number of boxes of cannabis or cannabis products, type of cannabis or cannabis products, weight and/or units of cannabis or cannabis products matches the label on the boxes containing the cannabis or cannabis products.
- The licensed distributor shall not take into possession or transport:
- Any cannabis or cannabis products that are not on the shipping manifest; or
- Any cannabis or cannabis products that are less than or greater than the amount reflected on the shipping manifest.
- The licensed distributor is responsible for any discrepancies between the shipping manifest and the cannabis or cannabis products in its possession during transport, and subject to any enforcement or disciplinary action related to such discrepancy.
- A licensed distributor shall not void or change a shipping manifest after departing from the originating licensed premises.
(d) A shipping manifest shall accompany every transport of cannabis or cannabis products.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26067 and 26070, Business and Professions Code.
§15315. Distributor Transport Only License.
(a) A licensed distributor transport only licensee may transport cannabis or cannabis products between licensees; however, they shall not transport any cannabis or cannabis products except for immature cannabis plants, seeds, and trade samples to a licensed retailer or licensed microbusiness authorized to engage in retail sales.
(b) A complete application for a distributor transport only license shall include all the information required in an application for a distributor license.
(c) The licensing fee for a distributor transport only license will be based in part upon whether the licensee intends to transport only cannabis or cannabis products that the licensee has cultivated or manufactured (self-distribution), or whether the licensee intends to transport cannabis or cannabis products cultivated or manufactured by other licensees.
(d) A distributor transport only licensee shall comply with all of the requirements for a holder of a distributor license, except for those related to quality assurance and regulatory compliance testing.
(e) A distributor transport only licensee shall not hold title to any cannabis or cannabis products unless the licensee also holds a Department-issued cultivation, manufacturing, retailer, or microbusiness license.
(f) Holding a distributor transport only license shall not authorize a licensee to:
- Engage in the delivery of cannabis or cannabis products as defined in Business and Professions Code section 26001(o);
- Engage in the wholesale, destruction, packaging, labeling, or storing of cannabis or cannabis products; or
- Arrange for the regulatory compliance testing of cannabis or cannabis products by a testing laboratory.
(g) A distributor transport only licensee who is licensed to engage in self-distribution and whose licensed premises will be on the same property as their licensed cultivation or licensed manufacturing premises shall comply with the security provisions contained in chapter 1, article 5 that are applicable to their licensed cultivation or licensed manufacturing premises.
Authority: Section 26013, Business and Professions Code.
Reference: Sections 26012 and 26070, Business and Professions Code.